Exhibit
4.3


 


THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY FOREIGN OR STATE SECURITIES LAWS AND MAY NOT BE
OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT
TO RESTRICTIONS ON TRANSFER AS SET FORTH IN THE AMENDED AND RESTATED
SHAREHOLDERS’ AGREEMENT DATED AS OF OCTOBER 11, 2001, COPIES OF WHICH MAY
BE OBTAINED UPON REQUEST FROM HEARTLAND PAYMENT SYSTEMS, INC. OR ANY SUCCESSOR
THERETO.


 


Warrant No.
[    ]


 


Dated: October 11, 2001


 


WARRANT



TO PURCHASE SHARES OF COMMON STOCK OF



HEARTLAND PAYMENT SYSTEMS, INC.


 


FOR VALUE RECEIVED, Heartland Payment Systems, Inc., a Delaware
corporation (the “Company”), hereby certifies that
[                      ],
and its successors or registered assigns (the “Holder”), is entitled to
purchase from the Company, at the times specified herein,
[         ] fully paid and
non-assessable shares of the common stock, par value $0.001 per share, of the
Company (the “Common Stock”), at the purchase price of $5.25 per share of
Common Stock (the “Exercise Price”), subject to the terms and conditions
provided herein. The number of shares of Common Stock to be received upon any
exercise or exchange of this Warrant and the purchase price per share of Common
Stock are subject to adjustment from time to time as provided in
Section 3.


 


This
Warrant is one of the Warrants (the “Warrants”) of the same form and having the
same terms as this Warrant, entitling the holders initially to purchase up to
an aggregate 1,000,000 shares of Common Stock. The Warrants have been issued
pursuant to the Securities Purchase Agreement dated as of October 11, 2001
(the “Securities Purchase Agreement”) among the Company and the several
purchasers listed on Schedule I thereto.


 


SECTION 1.
Exercise
Period. This Warrant may be exercised or exchanged in whole or in
part, at any time or from time to time, on any Business Day on or after
October 11, 2001 (the “Effective Date”) to and including 5:00 p.m., New
York City time, on October 11, 2006 (the “Expiration Date”). October 11,
2001 (the “Effective
Date”) to and including 5:00 p.m., New York City time, on
October 11, 2006 (the “Expiration Date”).


 


SECTION 2. Exercise of Warrant;
Optional Redemption of Warrants by the Company. (a)
To exercise or exchange this Warrant in whole or in part, the Holder shall
deliver to the Company, at the Warrant Office, on any Business Day: (i) a
written notice of the Holder’s election to exercise or exchange this Warrant,
which notice shall be substantially in the form of Annex A attached hereto (the
“Exercise
Notice”), (ii) payment of the Exercise Price for the shares of
Common Stock as to which this Warrant is being exercised or exchanged, payable
in accordance with Section 2(b), and (iii) this Warrant. This Warrant shall
be exercisable or exchangeable in whole or in part, but only for a whole number
of shares.


 


(b)           The Exercise Price
shall be payable, at the option of the Holder, either: (i) by wire transfer or
in cash or by certified or official bank check payable to the order of the
Company (by


 

















 


“exercise”) or (ii) by
acceptance of a reduced number of shares of Common Stock in accordance with the
further provisions of this Section 2(b) (by “exchange”). If the Holder
elects to acquire shares of Common Stock pursuant to the cashless exchange
procedure set forth in clause (ii), the Holder shall receive from the Company
upon exchange of this Warrant the number of shares of Common Stock determined
by multiplying (A) the number of shares of Common Stock with respect to which
this Warrant is being exchanged at such time by (B) a fraction, (1) the
numerator of which shall be the difference between (x) Current Market Price per
share of Common Stock at such time and (y) the Exercise Price per share of
Common Stock, and (2) the denominator of which shall be the Current Market
Price per share of Common Stock at such time. The Company shall issue a new
Warrant for the portion, if any, of this Warrant not being exercised or
exchanged as provided in Section 2(e).


 


(c)           Subject to the
provisions of Sections 2(d) and 4(b), upon receipt of an Exercise Notice, the
aggregate Exercise Price payable and this Warrant in accordance with
Section 2(a), the Company shall, as promptly as practicable and in any
event within five (5) Business Days thereafter, issue to the Holder one or more
stock certificates representing the aggregate number of shares of Common Stock
to which the Holder shall be entitled, and transfer to the Holder appropriate
evidence of ownership of such other securities or property (including any cash)
to which the Holder shall be entitled, in such denominations, and registered or
otherwise placed in, or payable to the order of, such name or names, as may be
directed in writing by the Holder, and the Company shall deliver such stock
certificates and evidence of ownership of such other securities or property
(including any cash) to the Person or Persons entitled to receive the same,
together with an amount in cash in lieu of any fraction of a share (or
fractional interest in any other security), as hereinafter provided. The
Company shall pay all expenses in connection with, and any and all documentary,
stamp or similar issue or transfer taxes of the United States or any state
thereof payable in respect of, the issue or delivery of shares of Common Stock
or other securities issuable upon exercise or exchange of this Warrant.
However, the Company shall not be required to pay any tax or other charge
imposed in connection with any assignment or transfer involved in the issuance
of any certificate or other evidence of ownership of Common Stock.


 


(d)           The stock certificate
or certificates or other evidence of ownership of Common Stock to be delivered
pursuant to Section 2(c) shall be deemed to have been issued, and the
Holder or any other Person so designated to be named therein shall, to the
extent permitted by law, be deemed to have become a holder of record of the
Common Stock or other securities or property represented thereby, including
having the right to vote any voting securities included therein or to consent
or to receive notice as a stockholder, as of the date on which the last of the
Exercise Notice, payment of the Exercise Price and this Warrant is received by
the Company as aforesaid, notwithstanding that the transfer books of the
Company shall then be closed or that such certificates or other evidence of
ownership shall not then actually have been delivered to the Holder.


 


(e)           If this Warrant shall
have been exercised or exchanged only in part, the Company shall, at the time
of delivery of the certificate or certificates or other evidence of ownership
of Common Stock, execute and deliver to the Holder, without charge, a new
Warrant evidencing the rights of the Holder to purchase the unpurchased Common
Stock called for by this Warrant, which new Warrant shall in all other respects
be identical to this Warrant, or, at the request of the Holder, appropriate
notation may be made on this Warrant and the same returned to the Holder.


 


(f)            The Company shall not be required to
issue any fractional share of Common Stock (or fractional interest in any other
security) upon exercise or exchange of this Warrant. As to any fraction of a
share (or fractional interest in any other security) that the Holder would
otherwise be entitled to receive upon such exercise or exchange, the Company
shall pay a cash adjustment in. respect of such fraction in an amount equal to
the same fraction of the Current Market Price per share of Common Stock (and/or
other security) on the date of exercise; provided,
however, that in the event that the Company undertakes


 


2

















 


a reduction in the number
of shares of Common Stock or other securities outstanding, it shall be required
to issue fractional shares or fractional interests in such other securities to
the Holder if the Holder exercises or exchanges all or any part of this
Warrant, unless the Holder shall have consented in writing to such reduction
and provided the Company with a written waiver of its right to receive fractional
shares or interests in accordance with this paragraph. If the Holder shall
exercise or exchange more than one Warrant in the same transaction, any payment
in respect of fractional shares (or other fractional interests) shall be based
on the final fraction resulting from aggregating all such exercises or
exchanges.


 


(g)           The Company hereby
agrees at all times to keep reserved for issuance and delivery upon exercise or
exchange of this Warrant such number of its authorized but unissued shares (or
treasury shares) of Common Stock or other securities of the Company from time
to time issuable upon exercise or exchange of this Warrant as will be
sufficient to permit the exercise or exchange in full of this Warrant. All such
shares and other securities shall be duly authorized and, when issued upon such
exercise or exchange, shall be validly issued, fully paid and non-assessable,
free and clear of all liens, security interests, charges and other encumbrances
or restrictions on sale (except to the extent of any applicable provisions set
forth in the Shareholders’ Agreement) and free and clear of all preemptive or
similar rights.


 


(h)           If the issuance of any
shares of Common Stock or other securities required to be reserved for purposes
of the exercise or exchange of this Warrant requires the registration with, or
approval of, any governmental authority or requires listing on any national
securities exchange or national market system before such shares or other
securities may be so issued, the Company shall at its expense use its best
efforts to cause such shares to be duly registered, approved or listed, as the
case may be, so that such shares or other securities may be issued in
accordance with the terms hereof, provided, however, that this provision
shall not obligate the Company to register such shares or other securities
under the Securities Act or qualify them under state securities or blue sky
laws, except as otherwise provided in the Shareholders’ Agreement.


 


(i)            Each certificate for securities issued upon exercise
of this Warrant, unless at the time of exercise or exchange such securities
shall be registered under the Securities Act, shall bear the following legend:


 


THIS SECURITY HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY FOREIGN OR
STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE
THEREWITH. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER
AS SET FORTH IN THE AMENDED AND RESTATED SHAREHOLDERS’ AGREEMENT DATED AS OF
OCTOBER 11, 2001, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM
HEARTLAND PAYMENT SYSTEMS, INC. OR ANY
SUCCESSOR THERETO.


 


Any certificate issued at
any time in exchange or substitution for any certificate bearing such legend
(except a new certificate issued upon completion of a public offering pursuant
to a registration statement under the Securities Act) shall also bear such
legend unless the securities represented thereby need no longer be subject to
restrictions on resale under the Securities Act or the Shareholders’ Agreement.


 


(j)            The Holder and the
Company agree to treat the exchange of this Warrant, in whole or in part, for
Common Stock pursuant to clause (ii) of Section 2(b) as a “reorganization”
within the meaning of Section 368 of the Internal Revenue Code of 1986, as
amended (the “Code”) and will not take any position inconsistent therewith
except as may be required by law. For purposes of the preceding sentence, the
Holder and the Company agree that this Warrant shall constitute a “plan of
reorganization” within the


 


3

















 


meaning of
Section 368(a) of the Code. The Holder and the Company agree to comply
with all applicable information reporting requirements under Section 368
of the Code.


 


(k)           Optional Redemption of
Warrants by the Company. (i) Subject to clause (ii) of this paragraph 2(k),
at any time prior to the earlier to occur of (a) October 11, 2004 (but
only on or after the date of delivery of the Adjustment Certificate described
in paragraph 3(o)) and (b) the 30th day after the occurrence of a Qualified
Public Offering, the Company shall have the right to redeem all, but not less
than all, of the outstanding Warrants and all, but not less than all, of the
shares of Common Stock issued upon any exercise or exchange hereof at the
applicable Optional Redemption Price, determined as of the date of redemption.
Irrevocable notice of such redemption shall be given by the Company to the
Holder not more than 30 days nor less than 15 days prior to the date of redemption,
stating the date of redemption and the redemption price, including a reasonably
detailed description of the method of calculation thereof. The Holder may
exercise or exchange this Warrant (in accordance with Section 2(a)) until
5:00 p.m., New York City time (the “Cutoff Time”), on the Business Day
preceding the date of redemption set forth in a valid notice of redemption. If
the Holder shall not have exercised or exchanged this Warrant prior to the
Cutoff Time then the right to purchase the Common Stock theretofore represented
by this Warrant shall terminate at such time and this Warrant shall thereafter
represent the right of the Holder to receive the Optional Redemption Price from
the Company in immediately available funds upon surrender of this Warrant to
the Company at the Warrant. Office. All Warrants redeemed by the Company shall
thereupon be canceled and retired by the Company.


 


(ii)           If Tested EBITDA is
less than $9.625 million, then the Company’s rights under clause (i) of this
paragraph 2(k) shall terminate, effective as of the earlier of the date of
delivery of the Adjustment Certificate described in paragraph 3(o) and May 15,
2003.


 


SECTION 3. Adjustments. (a) Stock
Splits and Reverse Splits. If, at any time on or after the Effective Date,
the Company shall (i) subdivide, split or reclassify its outstanding shares of
Common Stock into a larger number of shares of Common Stock; (ii) combine or
reclassify its outstanding shares of Common Stock into a smaller number of
shares of Common Stock or (iii) issue by reclassification of its Common Stock
other securities of the Company, then, in each such case, immediately upon the
occurrence of any such event, (A) the number of shares of Common Stock issuable
upon exercise or exchange of this Warrant shall be adjusted so as to equal the
number of shares of Common Stock the holder of this Warrant would have held
immediately after the occurrence of such event if such Holder had exercised or
exchanged this Warrant immediately prior to the occurrence of such event and
(B) the Exercise Price shall be adjusted to be equal to (x) the Exercise Price
immediately prior to the occurrence of such, event multiplied by (y) a fraction
(1) the numerator of which is the number of shares of Common Stock issuable
upon exercise or exchange of this Warrant immediately prior to the adjustment
in clause (A) above and (2) the denominator of which is the number of shares of
Common Stock issuable upon exercise or exchange of this Warrant immediately
after the adjustment in clause (A).


 


(b)           Dilutive Issuances
of Common Stock. If, at any time on or after the Effective Date, the
Company shall issue, sell or otherwise distribute any shares of Common Stock at
a price per share (determined by dividing (1) the total amount, if any,
received or receivable by the Company in consideration of the issuance or sale
of such securities by (2) the aggregate number of shares of Common Stock
issued, sold or otherwise distributed) that is less than the Exercise Price
then in effect on the date of such issuance or sale (before giving effect to
such issuance or sale), other than as described in Section 3(a), then,
immediately after the occurrence of any such event, the Exercise Price shall be
lowered so as to be equal to the price per share at which such shares of Common
Stock were issued, sold or otherwise distributed (determined as set forth
above).


 


4

















 


If any such issuance or
sale shall require an adjustment to the Exercise Price pursuant to the
foregoing provisions of this Section 3(b), then, effective at the time
such adjustment is made, the number of shares of Common Stock issuable upon
exercise or exchange of this Warrant shall be increased to a number determined
by multiplying the number of shares of Common Stock issuable upon exercise or
exchange of this Warrant immediately prior to such event by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately after giving effect to such event and the denominator of which
shall be the sum of the number of shares of Common Stock outstanding
immediately before giving effect to such event (both calculated on a fully
diluted basis) plus the number of shares of Common Stock which the aggregate
consideration received by the Company with respect to such event would purchase
at the Exercise Price per share of Common Stock on the date of such event
(before giving effect to such event).


 


The provisions of this
Section 3(b) shall not operate to increase the Exercise Price or reduce
the Exercise Price below $0.01, or reduce the number of shares of Common Stock
issuable upon exercise or exchange of this Warrant.


 


(c)           Dilutive Issuances
of Options. If, at any time on or after the Effective Date, the Company
shall issue, sell, distribute or otherwise grant in any manner (including by
assumption) any options, warrants or other rights to purchase Common Stock or
to purchase any stock or securities convertible into or exchangeable for Common
Stock (such options, warrants or other rights being herein called “Options” and
such convertible or exchangeable obligations or securities being herein called “Convertible
Securities”), whether or not such Options or the rights to convert
or exchange any such Convertible Securities in respect of such Options are
immediately exercisable, and the price per share for which Common Stock is
issuable upon the exercise of such Options or upon conversion or exchange of
such Convertible Securities in respect of such Options (determined by dividing
(i) the aggregate amount, if any, received or receivable by the Company in
consideration for the granting of such Options, plus the minimum aggregate
consideration payable to the Company upon the exercise of all such Options
plus, in the case of Options to acquire Convertible Securities, the minimum
aggregate consideration payable upon the issuance or sale of such Convertible
Securities and upon the conversion or exchange thereof (the “Total
Option Consideration”), by (ii) the total number of shares of Common
Stock issuable upon the exercise of such Options or upon the conversion or
exchange of all such Convertible Securities issuable upon the exercise of such
Options) shall be less than the Exercise Price then in effect on the date of
granting such Options (before giving effect to such grant), then, immediately
after the occurrence of any such event, the Exercise Price shall be lowered so
as to be equal to the price per share for which Common Stock is issuable upon
the exercise of such Options or upon conversion or exchange of such Convertible
Securities in respect of such Options (determined as set forth above).


 


If any such issuance or
sale shall require an adjustment to the Exercise Price pursuant to the
foregoing provisions of this Section 3(c), then, effective at the time
such adjustment is made, the number of shares of Common Stock issuable upon
exercise or exchange of this Warrant shall be increased to a number determined
by multiplying the number of shares of Common Stock issuable upon exercise or
exchange of this Warrant immediately prior to such event by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately after giving effect to such event and the denominator of which
shall be the sum of the number of shares of Common Stock outstanding
immediately before giving effect to such event (both calculated on a fully
diluted basis) plus the number of shares of Common Stock which the aggregate
consideration received by the Company with respect to such event would purchase
at the Exercise Price per share of Common Stock on the date of such event
(before giving effect to such event). For purposes of this Section 3(c),
the total maximum number of shares of Common Stock issuable upon the exercise
of such Options or upon conversion or exchange of such Convertible Securities
shall be deemed to have been issued as of the date of granting of such Options
and thereafter shall be deemed to be outstanding and the Company shall be
deemed to have received as consideration thereof the


 


5

















 


Total Option
Consideration. Except as otherwise provided in Section 3(e) below, no
additional adjustment of the Exercise Price shall be made upon the actual
exercise of such Options or upon conversion or exchange of such Convertible
Securities. If any Options shall be issued in connection with the issuance and
sale of other securities of the Company, together comprising one integral
transaction in which no specific consideration is allocated to such Options by
the parties thereto, such Options shall be deemed to have been issued for such
consideration, if any, as determined in good faith by the Board.


 


The provisions of this
Section 3(c) shall not operate to increase the Exercise Price or reduce
the Exercise Price below $0.01, or reduce the number of shares of Common Stock
issuable upon exercise or exchange of this Warrant.


 


(d)           Dilutive Issuances
of Convertible Securities. If, at any time on or after the Effective Date,
the Company shall issue, sell or otherwise distribute (including by assumption)
any Convertible Securities, whether or not the rights to exchange or convert
thereunder are immediately exercisable, and the price per share for which
Common Stock is issuable upon the conversion or exchange of such Convertible
Securities (determined by dividing (i) the aggregate amount received or
receivable by the Company as consideration for the issuance, sale or
distribution of such Convertible Securities, plus the minimum aggregate amount
of additional consideration, if any, payable to the Company upon the conversion
or exchange thereof (the “Total Consideration”), by (ii) the total
maximum number of shares of Common Stock issuable upon the conversion or
exchange of all such Convertible Securities) shall be less than the Exercise
Price then in effect on the date of such event (before giving effect to such
event), then, immediately after the occurrence of any such event, the Exercise
Price shall be lowered so as to be equal to the price per share for which
Common Stock is issuable upon the conversion or exchange of such Convertible
Securities (determined as set forth above).


 


If any such issuance or
sale shall require an adjustment to the Exercise Price pursuant to the
foregoing provisions of this Section 3(d), then, effective at the time
such adjustment is made, the number of shares of Common Stock issuable upon
exercise or exchange of this Warrant shall be increased to a number determined
by multiplying the number of shares of Common Stock issuable upon exercise or exchange
of this Warrant immediately prior to such event by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
after giving effect to such event and the denominator of which shall be the sum
of the number of shares of Common Stock outstanding immediately before giving
effect to such event (both calculated on a fully diluted basis) plus the number
of shares of Common Stock which the aggregate consideration received by the
Company with respect to such event would purchase at the Exercise Price per
share of Common Stock on the date of such event (before giving effect to such
event). For purposes of this Section 3(d), the total maximum number of
shares of Common Stock issuable upon conversion or exchange of all such
Convertible Securities shall be deemed to have been issued as of the date of
the issuance, sale or distribution of such Convertible Securities and
thereafter shall be deemed to be outstanding and the Company shall be deemed to
have received as consideration therefor the total Consideration. Except as
otherwise provided in Section 3(e) below, no additional adjustment of the
Exercise Price shall be made upon the actual conversion or exchange of such
Convertible Securities.


 


The provisions of this
Section 3(d) shall not operate to increase the Exercise Price or reduce
the Exercise Price below $0.01, or reduce the number of shares of Common Stock
issuable upon exercise or exchange of this Warrant.


 


(e)           Readjustment Upon
Expiration of Options and Convertible Securities. If (i) the purchase price
provided for in any Option referred to in Section 3(c) above or the
additional consideration, if any, payable upon the conversion or exchange of
any Convertible Securities referred to in Section 3(c) or 3(d) above or
the rate at which any Convertible Securities referred to in Section 3(c)
or 3(d) above are. convertible into or exchangeable for Common Stock shall
change at any time (other than under or by


 


6

















 


reason of provisions
designed to protect against dilution upon an event which results in a related
adjustment pursuant to this Section 3), or (ii) any of such Options or
Convertible Securities shall terminate, lapse or expire, the Exercise Price
then in effect shall forthwith be readjusted (effective only with respect to
any exercise or exchange of this Warrant after such readjustment) to the
Exercise Price that would then be in effect had the adjustment made upon the
issuance, sale, distribution or grant of such Options or Convertible Securities
been made based upon such changed purchase price, additional consideration or
conversion rate, as the case may be (in the case of any event referred to in
clause (i) above) or had such adjustment not been made (in the case of any
event referred to in clause (ii) above).


 


(f)            Dividends and Distributions of Common Stock,
Options and Convertible Securities. If the Company shall pay a dividend or make
any other distribution upon any capital stock of the Company payable in Common
Stock, Options or Convertible Securities, then, for purposes of Sections 3(b),
3(c) and 3(d) above, such Common Stock, Options or Convertible Securities shall
be deemed to have been issued or sold without consideration; provided that (i)
if such a dividend is a periodic dividend on capital stock payable from time to
time in Common Stock, Options or Convertible Securities in accordance with the
terms thereof, the consideration for such dividend shall be as determined in
good faith by the Board in connection with the authorization of such capital
stock and approved in accordance with Section 2.09(a)(xix) of the
Shareholders’ Agreement, (ii) any dividend or distribution of Common Stock
payable to the holders of Common Stock shall be treated as a stock split and the
Exercise Price shall be adjusted in accordance with paragraph 3(a) above
instead of this paragraph 3(f) and (iii) the provisions of this paragraph (f)
shall not operate to reduce the Conversion Price below $0.01.


 


(g)           Adjustment Upon Any Excess Liability or
Excess EBITDA Loss. If at any time there shall be any Excess Liability or any
Excess EBITDA Loss, the Exercise Price shall be adjusted at such time by
multiplying the Exercise Price then in effect by a fraction, the numerator of
which shall be (x) 8,443,167 multiplied by the Exercise Price in effect
immediately prior to such event, minus (y) the amount of such Excess Liability
(to the extent not previously resulting in an adjustment to the Exercise Price
pursuant to this paragraph 3(g)) or Excess EBITDA Loss, and the denominator of
which shall be 8,443,167 multiplied by the Exercise Price in effect immediately
prior to such event. Any adjustment made pursuant to this paragraph 3(g) shall
be treated as an adjustment to the purchase price of this Warrant.


 


(h)           Mergers. If, at any time on or after
the Effective Date, the Company shall merge, consolidate or effect a share
exchange with another entity, or shall sell, transfer or otherwise dispose of
all or substantially all of its assets to another entity and pursuant to the
terms of such merger, consolidation, share exchange or disposition of assets,
cash, shares of Common Stock or other securities of the successor or acquiring
entity, or property of any nature is to be received by or distributed to the holders
of Common Stock of the Company, then the Holder shall be entitled to receive in
respect of the Common Stock issuable upon exercise or exchange of this Warrant,
and upon delivery to the Company of this Warrant for cancellation, the amount
of cash, shares of Common Stock, other securities or other property that it
would have been entitled to receive if such Holder had exercised or exchanged
this Warrant in full immediately prior to the occurrence of such merger,
consolidation, share exchange or disposition of assets. In the case of any such
merger, consolidation, share exchange or disposition of assets, the successor
or acquiring entity shall expressly assume the due and punctual observance and
performance of each and every covenant and condition of this Warrant to be
performed and observed by the Company and all of the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as reasonably determined in good faith by resolution of the Board)
in order to provide for adjustments of the Common Stock issuable upon exercise
or exchange of this Warrant that shall be as nearly equivalent as practicable
to the adjustments provided for in this Section 3. The foregoing
provisions shall similarly apply to successive mergers, consolidations, share
exchanges and dispositions of assets.


 


7

















 


(i)            Recapitalizations. If, at any time on or
after the Effective Date, the Company shall effect any capital reorganization
or any reclassification of its capital stock (other than a change in par value
or from par value to no par value or from no par value to par value or as a
result of a stock subdivision, split, reclassification or combination of shares
as provided for in Section 3(a)), then in each case the Company shall
cause effective provision to be made so that this Warrant shall be exercisable
for the kind and number of shares of stock, other securities, cash or other
property to which a holder of the Common Stock deliverable upon exercise or
exchange of this Warrant would have been entitled upon such reorganization or
reclassification and any such provision shall include adjustments in respect of
such stock, securities or other property that shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 3 with
respect to this Warrant.


 


(j)            Special Dividends. Without duplication of any
other adjustment provided for in this, Section 3, if at any time on or
after the Effective Date the Company distributes to holders of Common Stock any
evidences of indebtedness, cash, preferred stock or any rights or other
securities of the Company, the Exercise Price shall be adjusted by multiplying
the Exercise Price in effect on the record date for such distribution by a ratio
(the “Ratio”) equal to the amount determined by dividing (i) the Market Value
of the Company on such record date less the fair market value on such record
date, as determined by the Board in good faith, of the total assets to be
distributed to the holders of Common Stock, by (ii) the Market Value of the
Company on such record date. The “Market Value of the Company” on a record date
shall be equal to the Current Market Price of a share of Common Stock on such
date, multiplied by the total number of shares of Common Stock outstanding on
the record date. Each adjustment of the Exercise Price required by this
Section 3(i) shall become effective immediately after the record date for
the determination of the stockholders entitled to receive the distribution in
respect of which such adjustment is made. When any such adjustment of the
Exercise Price is required to be made, the number of shares of Common Stock
issuable upon the exercise or exchange of this Warrant shall be changed to the
number equal to the number of shares of Common Stock issuable upon the exercise
or exchange of this Warrant immediately prior to such adjustment divided by the
Ratio.


 


(k)           Adjustment Rules. The following provisions
shall be applicable to the making of adjustments of the number of shares of
Common Stock issuable upon exercise or exchange of this Warrant:


 


(i)            No adjustment in the
Exercise Price shall be required in the case of: (A) the granting of options to
purchase shares of Common Stock pursuant to any employee benefit plans or employee
stock option plans approved by the Board and as required by Section 2.09
of the Shareholders’ Agreement, and the issuance of shares of Common Stock upon
the exercise thereof, (B) the issuance of any Warrants or the exercise or
exchange for shares of Common Stock of any Warrants or Bridge Warrants (as
defined in the Shareholders’ Agreement); (C) the granting of “equity kickers”
to senior lenders providing new senior loans to the Company or any of its
Subsidiaries; or (D) the issuance or sale of Common Stock upon conversion,
exercise or exchange of any Convertible Securities, but only if with respect to
this clause (D), any adjustments required to be made upon the issuance or sale
of such securities were so made.


 


(ii)           Whenever any adjustment
is required under any provision of this Section 3, the Company shall
compute (or may retain a firm of independent public accountants of recognized
national standing (which may be any such firm regularly employed by the
Company) to compute) the adjustments and shall prepare a certificate signed by
the principal financial officer of the Company (or cause any such independent
public accountants to execute a certificate) setting forth the adjusted
Exercise Price and adjusted amount of Common Stock or other stock, securities,
cash and other property issuable upon exercise or exchange of the Warrants, and
showing in reasonable detail the facts upon which such adjustments are based,
and the Company shall


 


8

















 


forthwith deliver a
notice of such adjustments and setting forth such adjustments to all record
holders of the Warrants.


 


(iii)          If the amount of any
adjustment of the Exercise Price required pursuant to this Section 3 would
be less than 1% of the Exercise Price in effect at the time such adjustment is
otherwise so required to be made, such amount shall be carried forward and an
adjustment with respect thereto made at the earlier of (i) exercise or exchange
of any Warrants by any holder or (ii) at the time of and together with any
subsequent adjustment which, together with such amount and any other amount or
amounts so carried forward, shall aggregate at least 1% of such Exercise Price.
All calculations under this Section 3 shall be made to the nearest
one-tenth of a cent ($0.001) or the nearest one-thousandth of a share or
security, as the case may be.


 


(iv)          If on or after the
Effective Date the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or distribution
or other rights and shall, thereafter and before the payment of such dividend
or distribution or the granting of such rights, legally abandon its plan to pay
or deliver such dividend, distribution or other rights, then thereafter no
adjustment shall be required by reason of the taking of such record and any
such adjustment previously made in respect thereof shall be rescinded and
annulled.


 


(l)            The Company may, at its option, at any time
during the term of the Warrant, reduce the then current Exercise Price to any
amount, consistent with applicable law, deemed appropriate by the Board.


 


(m)          If at any time, as a result of any adjustment
made pursuant to this Section 3, the Holder shall become entitled to
receive any shares of the Company other than shares of Common Stock or to
receive any other securities, the number of such other shares or securities so
receivable upon exercise or exchange of this Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions contained in Section 3 with respect to the
Common Stock.


 


(n)           The Company will not, by amendment of its
certificate of incorporation or bylaws or other action or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the carrying
out of all the provisions of this Section 3 and in the taking of all such
action as may be necessary or appropriate in order to protect the exercise
rights of the Holder against impairment.


 


(o)           Simultaneous with the delivery of the audited
financial statements for the fiscal year ending December 31, 2002, the
Company shall deliver to each Holder a certificate of the chief financial
officer of the Company (an “Adjustment Certificate”) stating Tested EBITDA and
setting forth in reasonable detail the calculations required to determine
Tested EBITDA. Effective on the earlier of the date such Adjustment Certificate
is delivered and May 15, 2003:


 


(i)            If Tested EBITDA is
less than $13.125 million, then the number of shares of Common Stock issuable
upon exercise or exchange of this Warrant shall immediately be increased to a
number determined by multiplying the number of shares of Common Stock issuable
upon exercise or exchange of this Warrant immediately prior to such date by an
Adjustment Fraction determined as follows:


 


9

















 


	
  Tested EBITDA:

  	
   

  	
  Adjustment
  Fraction:

  	
   

  
	
  Less than $11.125
  million

  	
   

  	
  2.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal
  to $11.125 million but less than $11.625 million

  	
   

  	
  1.8

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal
  to $11.625 million but less than $12.125 million

  	
   

  	
  1.6

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal
  to $12.125 million but less than $12.625 million

  	
   

  	
  1.4

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal
  to $12.625 million but less than $13.125 million

  	
   

  	
  1.2

  	
   

  



 


(ii)           If Tested EBITDA is
greater than or equal to $13.125 million but less than or equal to $18.375
million then there shall be no adjustment under this paragraph 3(o).


 


(iii)          If Tested EBITDA is
greater than $18.375 million, then the number of shares of Common Stock
issuable upon exercise or exchange of this Warrant shall immediately be
decreased to a number determined by multiplying the number of shares of Common
Stock issuable upon exercise or exchange of this Warrant immediately prior to
such date by an Adjustment Fraction determined as follows:


 


	
  Tested EBITDA:

  	
   

  	
  Adjustment
  Fraction:

  	
   

  
	
  Greater than $18.375
  million but less than or equal to $18.875 million

  	
   

  	
  0.8

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than $18.875
  million but less than or equal to $19.375 million

  	
   

  	
  0.6

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than $19.375
  million but less than or equal to $19.875 million

  	
   

  	
  0.4

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than $19.875
  million but less than or equal to $20.375 million

  	
   

  	
  0.2

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than $20.375
  million

  	
   

  	
  0

  	
   

  



 


For the avoidance of
doubt, if the Adjustment Fraction is zero then this Warrant shall be deemed to
have been canceled in its entirety.


 


If the Company fails to
deliver an Adjustment Certificate to each Holder on or prior to May 15, 2003,
then, for purposes of this paragraph 3(o) and paragraph 2(k), Tested EBITDA
shall be deemed to be less than $9.625 million. Any adjustment made pursuant to
this paragraph 3(o) shall be treated as an adjustment to the purchase price of
this Warrant.


 


10

















 


SECTION 4.
Warrant Office; Transfer, Division and Combination. (a) So long as this Warrant
remains outstanding, the Company shall maintain an office (the “Warrant
Office”) in the continental United States where the Warrants may be presented
for exercise, transfer, division or combination as provided in this Warrant.
The Warrant Office shall be at Heartland Payment Systems, Inc., 130 Nassau
Street, Princeton, NJ 08452, unless and until the Company shall designate and
maintain some other office for such purposes and give notice thereof to the
Holder.


 


(b)           So long as the Shareholders’ Agreement has
not terminated (whether by its terms or otherwise), the transfer of this
Warrant or any rights hereunder and the transfer of the securities issued upon
exercise of this Warrant shall be subject to the limitations set forth therein.


 


(c)           The Company may deem and treat the Person in
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by any
Person other than the Company) for all purposes and shall not be affected by
any notice to the contrary, until due presentment of this Warrant for
registration of transfer as provided in this Section 4.


 


(d)           The Company shall maintain at the Warrant
Office books for the registration of transfer of this Warrant, and, subject to
the limitations set forth in Section 4(b), transfer of this Warrant and
all rights hereunder shall be registered, in whole or in part, on such books,
upon the surrender of this Warrant at the Warrant Office, together with (i) a
written assignment of this Warrant, substantially in the form of Annex B
attached hereto, duly executed by the Holder or its duly authorized agent or
attorney, (ii) if the Shareholders’ Agreement has not terminated, evidence
reasonably satisfactory to the Company that such assignment has been made in
compliance therewith and (iii) funds sufficient to pay any transfer taxes
payable upon such transfer. Upon such surrender, the Company shall, without
charge, execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denominations specified in such instrument of
assignment (which shall be whole numbers of the shares of Common Stock for
which this Warrant shall be exercisable only), and shall issue to the assignor
a new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall be promptly canceled.


 


(e)           This Warrant may be divided into new Warrants
or combined with other Warrants upon the presentment of this Warrant, or this
Warrant and any other Warrants with which this Warrant is to be combined, at
the Warrant Office, together with a written notice specifying the names and
denominations (which shall be whole numbers of shares of Common Stock only) in
which the new Warrant or Warrants are to be issued, signed by the Holders
hereof and thereof or their respective duly authorized agents or attorneys.
Subject to compliance with the other provisions of this Section 4 as to
any transfer or assignment which may be involved in the division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.


 


(f)            Upon receipt of evidence satisfactory to the
Company (in its reasonable discretion) of the ownership of and the loss, theft,
destruction or mutilation of any Warrant and, in the case of any such loss,
theft or destruction, upon receipt of indemnity or security reasonably
satisfactory to the Company (if the Holder is a nationally chartered financial
institution, its own agreement being satisfactory) or, in the case of any such
mutilation, upon surrender and cancellation of such Warrant, the Company will
make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant,
a new Warrant of like tenor and representing the right to purchase the same
aggregate number of shares of Common Stock.


 


(g)           The Company shall pay all expenses, taxes
(other than transfer taxes) and other charges payable in connection with the
preparation, issuance and delivery of Warrants hereunder.


 


11

















 


SECTION 5.
Definitions. As used herein, the following terms shall have the following
meanings (all terms defined in this Section 5 or in other provisions of
this Warrant in the singular to have the same meanings when used in the plural
and vice versa):


 


“Board”
shall mean the Board of Directors of the Company.


 


“Business
Day” shall mean any day, other than a Saturday, Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by
law or executive order to close.


 


“Current
Market Price” shall mean on any date, for any security, (i) if such security is
of a class or series of securities then listed or admitted to trading on any
national securities exchange or traded on any national market system, the
average of the daily closing prices for the ten trading days before such date,
excluding any trades which are not bona fide, arms’ length transactions (and
the closing price for each such day shall be the last sale price on such date
or, if no such sale takes place on such date, the average of the closing bid
and ask prices on such date, in each case as officially reported on the
principal national securities exchange or national market system on which
securities are then listed, admitted to trading or traded), (ii) if such
security is not of a class or series of securities then listed or admitted to
trading on any national securities exchange or traded on any national market
system, the average of the daily reported closing bid and ask prices in the
over-the-counter market for the ten trading days before such date, as shown by
the NASD automated quotation system, or if such securities are not then quoted
on such system, as published by the National Quotation Bureau, Incorporated or
any similar successor organization, and in either case as reported by any
member firm of the New York Stock Exchange selected by the Company, and (iii)
if such security is not of a class or series of securities then listed or
admitted to trading on any national securities exchange or traded on any
national market system, and if no closing bid and asked prices thereof are then
so quoted or published in the over-the-counter market, the “Current Market
Price” of such security shall be the fair value thereof on such date, which
shall be determined in good faith by the Board (provided, that, if the Majority
Holders notify the Company in writing disputing any such determination of the
Board within 20 days after such determination, the holders of the Warrants
shall select an investment bank of national recognition reasonably acceptable
to the Company to determine the fair value of such security, the investment
bank’s determination to be conclusive, absent manifest error, and the cost of
such determination to be borne by the Company, except that the holders of the
Warrants (with such costs allocated among them ratably, based on the number of
Warrants held by each of them) shall bear such costs if the investment bank’s
determination is equal to or less than the Board’s determination).


 


“Excess
EBITDA Loss” shall have the meaning set forth in the Securities Purchase
Agreement.


 


“Excess
Liability” shall have the meaning set forth in the Securities Purchase
Agreement. “include” and “including” shall be construed as if followed by the
phrase “without being limited to”.


 


“Majority
Holders” shall mean, at the time in question, those holders of the Warrants
which have the right to receive at least two-thirds of the total number of
shares of Common Stock issuable upon the exercise or exchange of all Warrants
then outstanding.


 


“NASD”
shall mean the National Association of Securities Dealers, Inc.


 


“Optional
Redemption Price” shall mean, at any time,


 


(i)            in the case of this
Warrant, an amount equal to (x) (A) $10.50 (which amount shall be subject to
adjustment consistent with the adjustments to the Exercise Price hereof
whenever there shall occur a stock dividend, stock split, combination,
reorganization,


 


12

















 


reclassification or
similar event involving a change in the capital structure of the Company) minus
(B) the Exercise Price at such time, times (y) the total number of shares of
Common Stock for which this Warrant is exercisable or exchangeable at such
time; and


 


(ii)           in the case of shares
of Common Stock issued upon exercise or exchange of this Warrant, an amount
equal to (x) (A) $10.50 (which amount shall be subject to adjustment consistent
with the adjustments to the Exercise Price hereof whenever there shall occur a
stock dividend, stock split, combination, reorganization, reclassification or
similar event involving a change in the capital structure of the Company) minus
(B) the Exercise Price for Warrants outstanding at such time, times (y) the
total number of such shares of Common Stock.


 


“Person”
shall mean an individual, corporation, limited liability company, partnership,
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.


 


“Qualified
Public Offering” shall mean a Qualified Public Offering as defined in the
Shareholders’ Agreement.


 


“Securities
Act” shall mean the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.


 


“Shareholders’
Agreement” shall mean the Amended and Restated Shareholders’ Agreement dated as
of October 11, 2001 among the Company and the parties named on
Schedule 1.01 thereto, as the same may be amended, restated, supplemented
or otherwise modified from time to time.


 


“Tested
EBITDA” means, for the twelve months ending December 31, 2002, the net
income or loss of the Company and its Subsidiaries plus (a) without duplication
and to the extent deducted in determining such net income or loss, the sum of
(i) consolidated interest expense for such period, (ii) consolidated income tax
expense for such period, (iii) all amounts attributable to depreciation and
amortization for such period, and minus (b) without duplication and to the
extent included in determining such net income or loss, any extraordinary gains
for such period, all determined on a consolidated basis in accordance with U.S.
generally accepted accounting principles and based on financial statements
audited and certified by a “big 5” firm of independent public accountants (or
any successor to such a firm) and determined on a basis consistent with the
“EBITDA” calculations set forth in Item VI.C (Financial Model) of the Private
Placement Memorandum attached as Schedule 3.23 to the Securities Purchase
Agreement.


 


SECTION 6. Notices. Any
notice, demand or delivery authorized by this Warrant shall be in writing and
shall be given or made to the Holder or the Company, as the case may be, by
physical delivery, U.S. mail (registered or certified mail, postage prepaid, return
receipt requested) or overnight courier or by transmission by facsimile to such
party at its, his or her address (or facsimile number) set forth below, or such
other address (or facsimile number) as shall have been specified by like notice
by such party:


 


(i) if to the Company, to


 


Heartland Payment
Systems, Inc.


130 Nassau Street


Princeton, NJ 08452


Attention: Robert H.B.
Baldwin, Jr.


Facsimile: 609-683-3815


 


13

















 


with a copy to:


 


Dorsey & Whitney LLP


250 Park Avenue New York,
NY 10177


Attention: Wesley C.
Fredericks, Jr.


Facsimile: 212-953-7201


 


(ii) if to the Holder,
to:


 


[Address]


 Attention:
[                                      ]


Facsimile:
[                                       ]


 


with a copy to:


 


[Davis Polk &
Wardwell


450 Lexington Avenue


New York, New York 10017


Attention: Nancy L.
Sanborn


Facsimile: 212-450-3800]


 


[Pepper, Hamilton &
Scheetz


3000 Two Logan Square


18th and Arch Streets


Philadelphia, PA 19103


Attention: James D.
Epstein


Facsimile: 215-981-4750]


 


Each such notice, demand
or delivery shall be effective upon receipt in the case of physical delivery or
overnight courier, upon confirmation of receipt by or on behalf of the
addressee in the case of transmission by facsimile if received prior to 5:00
p.m., New York City time, and, if received after 5:00 p.m., New York City time,
on the date after such receipt, and three Business Days after deposit in the
U.S. mails in the case of mailing.


 


SECTION 7.
Rights of the Holder. Prior to the exercise or exchange of this Warrant, the
Holder shall not, by virtue hereof, be entitled to any rights of a stockholder
of the Company, including, without limitation, the right to vote, to receive
dividends or other distributions, to exercise any preemptive right or to
receive any notice of meetings of stockholders or any notice of any proceedings
of the Company except as may be specifically provided for herein.


 


SECTION 8.
Notices of Record Date, Etc. If the Company shall take a record of the holders
of its Common Stock (or other securities at the time deliverable upon the
exercise or exchange of this Warrant) for the purpose of (i) entitling or
enabling them to receive any dividend or other distribution, or to receive any
right to subscribe for or purchase any shares of stock of any class or any
other securities, or to receive any other right; or (ii) any capital
reorganization of the Company, any reclassification of the capital stock of the
Company, any consolidation or merger of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the
surviving entity), or any transfer of all or substantially all of the assets of
the Company; or (iii) the voluntary or involuntary dissolution, liquidation or
winding-up of the Company, then, and in each such case, the Company will give
notice thereof to the Holder of this Warrant, in accordance with
Section 6, specifying in such notice, as the case may be, (x) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, and stating


 


14

















 


the
amount and character of such dividend, distribution or right, or (y) the
effective date on which such reorganization, reclassification, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record of Common Stock
(or such other securities at the time deliverable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other securities) for the securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up. Such notice shall be given by the Company at least
five Business Days prior to the record date or effective date for the event
specified in such notice, unless such event is to occur in connection with the
Company’s preparation for, or consummation of, an initial public offering, in
which case the Company shall be required to give such notice only two Business
Days prior to such record date or effective date.


 


SECTION 9.
Investment Representations of Holder. By acceptance of this Warrant, the Holder
of this Warrant hereby represents that:


 


(a)           It understands that this Warrant is not
registered, and the shares of Common Stock or other securities issuable upon
the exercise or exchange of this Warrant may not be registered under the
Securities Act or applicable state securities laws (except as provided in the
Shareholders’ Agreement or as the Company may otherwise agree), and that
neither this Warrant nor the shares of Common Stock or other securities
issuable upon the exercise or exchange of this Warrant may be offered or sold,
unless registered under the Securities Act or an exemption from such
registration is available.


 


(b)           It is acquiring this Warrant, and will
acquire the shares of Common Stock or other securities issuable upon the
exercise or exchange of this Warrant, if at all, for its own account, not as
nominee or agent for any other Person, for investment and not with a view to
the resale or distribution of such securities or any interest therein other
than in a transaction that is registered or exempt from registration under the
Securities Act; provided that by making this representation, the Holder, does
not agree to hold any securities for any minimum or specific term and reserves
the right to dispose of the securities in compliance with the Shareholders’
Agreement and applicable securities laws.


 


SECTION 10.
Governing Law. This Agreement shall be governed by the laws of the State of New
York, without regard to the conflicts of laws provisions thereof.


 


SECTION 11.
Waivers; Amendments. No failure or delay of the Holder in exercising any power
or right hereunder shall operate as a waiver thereof (except where a specific
time period for the exercise of such power or right is expressly set forth
herein), nor shall any single or partial exercise of any such right or power
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law. The provisions of this
Warrant may be amended, waived or otherwise modified with (and only with) the
written consent of the Company and the Majority Holders; provided that the
number of shares issuable upon exercise of this Warrant, the Exercise Price,
the Effective Date, the Expiration Date, the definition of Majority Holders,
Section 2(k), Section 3 and this Section 11 may be amended,
waived or otherwise modified only with the written consent of the Company and
the Holder of the Warrant to be so amended, waived or otherwise modified. In
the event of any such amendment, modification or waiver, the Company shall give
prompt notice thereof to all holders of Warrants and shares of Common Stock
issued upon the exercise or exchange of Warrants and, if appropriate, notation
thereof shall be made on all Warrants thereafter surrendered for registration
of transfer or exchange.


 


SECTION 12.
Separability. Any term or provision of this Warrant which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable any other term or provision of


 


15

















 


this
Warrant or affecting the validity or enforceability of any of the terms or
provisions of this Warrant in any other jurisdiction.


 


SECTION 13.
Section and Other Headings. The section and other headings contained
in this Warrant are for convenience of reference only, are not part of this
Warrant and are not to affect the construction of or be taken into
consideration in interpreting this Warrant.


 


16

















 


IN WITNESS WHEREOF, the
Company has caused this Warrant to be signed by its duly authorized officer as
of the date hereof.


 


	
   

  	
  HEARTLAND PAYMENT SYSTEMS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


17

















 


ANNEX A


 


FORM OF EXERCISE
NOTICE


 


(To be executed by
the registered holder hereof)


 


The undersigned
registered holder of this Warrant (the “Registered Holder”) exercises or exchanges
this Warrant for the purchase of
                                    
shares of the Common Stock, par value $0.001 per share (the “Common
Stock”), of Heartland Payment Systems, Inc., a Delaware corporation,
and herewith makes payment therefor of $
                                   
(such payment being made [check one] (x) [   ] by
wire transfer or in cash or by certified or official bank check or (y)
[   ] by acceptance of a reduced number of shares of Common
Stock upon cancellation of this Warrant as provided in Section 2(b)
of this Warrant, all on the terms and conditions specified in this Warrant, and
requests that (i) certificates and/or other instruments covering such shares of
Common Stock be issued in accordance with the instructions given below and (ii)
if such shares of Common Stock shall not include all of the shares of Common
Stock to which the Registered Holder is entitled under this Warrant, that a new
Warrant for the unpurchased balance of the shares of Common Stock issuable
hereunder be delivered to the undersigned.


 


 


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name of Registered
  Holder (Please Print)

  
	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature of Registered
  Holder

  
	
   

  
	
   

  
	
  Instructions for
  issuance and

  registration of shares of

  Common Stock and any other

  assets deliverable upon exercise

  or exchange of this Warrant:

  
	
   

  
	
   

  
	
   

  	
   

  	
  Social Security or
  Other

  
	
  Name of Registered
  Holder

  	
  Identifying Number:

  	
   

  	
   

  
	
  (please print)

  
	
   

  
	
  Please deliver
  certificate and

  other assets to the following

  address:

  
								



 


1

















 


ANNEX B


 


FORM OF ASSIGNMENT

(To be executed by the registered holder hereof)


 


FOR VALUE RECEIVED, the
undersigned registered owner of this Warrant hereby sells, assigns and
transfers unto the assignee named below all the rights of the undersigned under
this Warrant with respect to the number of shares of the Common Stock, par
value $0.001 per share, of Heartland Payment Systems, Inc. covered thereby set
forth below to:


 


	
  Name of Assignee

  	
   

  	
  Address

  	
   

  	
  Number of Shares of

  Common Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


 


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name of Registered
  Holder (Please Print)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature of Registered
  Holder

  
	
   

  	
   

  
	
  Witness:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  



 


2